Paean to Jerry Dominelli

"De mortuis nil nisi bonum." (Speak no ill of the dead.) The University of San Diego Magazine for summer of 2010 notes in its "In Memoriam" section the death of J. David "Jerry" Dominelli, who graduated from USD in 1969 with a bachelor of arts degree. There is no mention that Dominelli, who died Aug. 2, 2009, ran an $80 million Ponzi scheme that rocked San Diego in the 1980s and early 1990s. One of his daughters, Jennifer, USD class of 1998, is quoted saying, "The inner man who was my dad was nothing like the outer image portrayed to the public...He understood deeply what life was really all about."

Comments

Hard working, generous, and an insane liar. He was the smartest in rooms full of smart money. Sometimes liars talk and money walks. Like Gatsby, Jerry Dominelli was a great American. Now he is only legend, and unlike the fictional Gatsby, seems completely unreal.

Response to post #1: How smart was Dominelli? A psychiatrist who had treated him said his IQ was 120. That's hardly impressive. However, he appeared to be a sociopath. He believed his own lies, which made him credible to investors. With his thick glasses, he looked like he might be a genius. And he had the ebullient Nancy Hoover acting as the "Mr. Outside," selling the scam to the public, along with super-salesman Ted Pulaski. Dominelli was love-sick; he wanted to shower everything on Nancy Hoover. There are still unsolved mysteries about how the public bit into this one. Best, Don Bauder

Dominelli lacked the charm we expect in great grifters, Nancy Hoover supplied this for him, Victim and perp in this scam shared the same religion, that one could get fabulous riches without working. Perhaps the nearby racetrack played a part.

Response to post #5: Sounds like I should have paid more attention in my only psych class in college. I knew 90-110 was average but didn't know 120 was in the upper 9%. That 120 number is what a psychologist (come to think of it, I don't remember that he was a psychiatrist, as I said earlier) told me. Best, Don Bauder

USD has a sad history of accepting largess from some unpleasant characters who want their names on buildings, or on colleges, or on institutes. One of the great benefactors of USD was the odious "Dirty Ernie" Hahn, developer, contractor, and philanthropist. USD accepted money from the foul-mouthed and chauvinistic Sid Craig (Jenny's husband) and put their names on something or another. USD also received benefit from funds from Joan Kroc, and Doug Manchester.

It should be no surprise that the university printed an obit for one of the greatest local scandals of the 20th century without making mention of that fact. (How much did his daughter pay for that mention?)

Response to post #9: How about John Moores? He dumped $487 million of Peregrine stock during the fraud period. Then he raked in $700 million to a billion selling real estate that he had received for very low prices in the ballpark district. He got away with it, thanks to San Diego judges. Then he rode off to Texas with the loot, with his name adorning a USD department. Best, Don Bauder

Oh, I'd forgotten about Moores and USD. He was getting into all the local universities, one way or the other. SDSU was getting money from him, and he was even a UC regent. Proves my point about USD. Yet, it claims to be a Catholic university, as it takes dirty money from nasty people.

In general, about half of the population has an iq of 90-110 and are considered average. Someone with an iq of 120 would be considered superior and would be in about the 91st percentile, meaning they are smarter,as measured, than about 91% of the population. Whether or not you were impressed with Dominelli, being in the top 9% is impressive in my book.

By lifesbeengood

The problem is intellect/IQ level and honesty, honor, compassion and ethics are all mutually exclusive qualities.

Reminds me of people who want potential SCOTUS justices to be gifted a seat on the court just because they went to Harvard or Yale and were on the law review, when the real test should be that ethics should put first and foremost ahead of everything else.

Response to post #11
Don, thanks for bringing up John Moores. It's interesting how much of Peregrine's management went to trial and paid a price for that debacle. However, Moores has been able to hide in plain sight.

I wonder how much loot Nancy buried in coffee cans

There is a documentary played on Showtime every now and then called "Cocaine Cowboys" about a crew of coke smugglers back in the 80's in Miami, and they buried their cash out in the ground around their 100 acre estates.

Response to post #13: It is an unfortunate fact of American higher education that the universities all around the U.S. have sold out to the business community. In San Diego, the biotech industry is determining the curricula through its donations. Steve Weber of SDSU is far more interested in courting local nabobs than providing education to students. Have you read Matt Potter's exposes of financial shenanigans of UCSD brass? Best, Don Bauder

Response to post #14: Yale Law School is notorious for turning out lawyers with no grasp of ethics. In fact, some think Yale teaches law students how to evade the law on behalf of clients. Best, Don Bauder

Response to post #15: Yes, and those who went to prison had dumped a fraction of the stock that Moores dumped. I have always suspected that the word came from the White House: let Moores off. Best, Don Bauder

Response to post #17: After serving a couple of years in prison, Nancy admitted that she had lied in court when denying that she had knowingly sent out phony statements to investors, and had lied when she said she had not burned corporate records. Best, Don Bauder

Response to post #18: Back about 15 years ago, I did U-T columns about a real estate developer who buried money in tin cans in his backyard. His ex-girlfriend -- who was quite young -- ratted on him. Then she went back to him. I don't know if she stayed. I don't remember his name, other than that it was polysyllabic. Best, Don Bauder

"In China, if you are a 1 in a million kind of guy, there are 1,000 guys just like you".

Domineli impersonated a genius in currency trading. but in fact was more stupid than the merely ignorant, he didn't know what he didn't know. He had cunning, and a sociopath's genius for impersonation, he had a reptile sense of what the listener wanted to hear, and said it.

He made an empire out of pure fantasy, and for that we must hail him a grifter genius.

Response to post #28: Yes, San Diego is no Cambridge. Another thing to consider: Dominelli, through the money finders to whom he paid a commission, recruited investors from Orange County, Palm Springs, Palm Desert, etc. Best, Don Bauder

BTW surfpuppy, since you consider all of those qualities mutually exclusive, which ones aren't you?

Well, here is what I can say- I would never perpetrate a fraud, I would put the community above the individual, I would put the people ahead of artificial people> aka corporations, I would not seek to drain all the money out of society even if I legally could if it would kill or cause damage to the society as a whole (pulbic employees and their pensions).......I don't think that having a high IQ means you are qualified for anything based on that sole criteria.

So where do I fit in-I dunno, but I can say this, I am not afraid to look myself in the face every morning and be happy about who I am.

Here is an article that was published recently about whether intelligence is the most important, or over riding factor, in a fairly important job;

"Edley is undoubtedly right that Kagan is smart. Some recent nominees faced nagging questions about their intellectual firepower. Not Kagan."

**"But Edley is unsuccessful at showing that intellectual firepower is the most important quality for a Supreme Court justice."***

lifesbeengood said: "Paul,those stats are based on the population as a whole, not by geographic location. But I'm sure you know that. By your logic, if you lived in Cambridge and had an iq of 120, you would be on the low end of the scale."

The 1980 population was 1,861,846. Even if you assume that all of Cambridge (not just MIT and Harvard) is significantly smarter than all of San Diego and put the figure at 5% instead, you would still have over 93,000 people in San Diego in 1980 with higher IQs than Dominelli, or roughly the current population of Carlsbad.

Response to post #33: If you would put the community above the individual, put the people ahead of the corporation and never commit fraud, you will never make it into San Diego's downtown business establishment. Thus, you won't have a mayor or most councilmembers dancing at the end of the string you manipulate. Best, Don Bauder

Response to post #34: I think the key variable here is sociopathy, not intelligence. The Ponzi schemer has to have a certain amount of intelligence, but what is critical is that he/she have the latent ability to con people, and have no conscience about doing so. Best, Don Bauder

You gave the IQ numbers, so it is silly for you to now complain they are not valid.

The point is that his IQ put him behind between 100k and 200k San Diegans, yet he pulled off a large ponzi scheme. If not IQ, what was it about him that allowed him to so successfully sucker the rich and powerful in San Diego?

Don mentioned that Dominelli was a sociopath, which undoubtedly played a role.

There also seems to be something inherent in a large part of the San Diego rich and elite that allows them to be scammed fairly regularly and fairly easily. Why is that?

If not IQ, what was it about him that allowed him to so successfully sucker the rich and powerful in San Diego?

There are "con" men all over the world that do this-maybe not as large, but still pull the con.

But the con is the smaller part of the equation needed to pull a con. The other part of the con equation, the much bigger part that is mandatory for it to succeed and has nothing to do with the con man, that is the greed of the sucker/victim. Without the greed there can be no con. A con will ONLY work with a greedy victim.

And that is it, that confidence of the con man and the greed of the victim, that allows the J David's to reel in the suckers.

I won't argue that intelligence and ethics are mutually exclusive; instead, I'd say highly intelligent people who receive no formal or informal continuing training in reaching ethical decisions seem to account for most if not all of the current troubles we have seen in the markets lately, especially the derivatives disaster.

RE #33: "I don't think that having a high IQ means you are qualified for anything based on that sole criteria."

Amazingly enough, my 99.99 percentile ranking on the California Test of Mental Maturity was the only thing that got me admitted into the Annapolis local group of Mensa, decades before I unofficially minored in Beer Appreciation at USD while Jennifer was still re-writing drafts of her admissions application.

Response to post #39: Why do San Diegans get scammed all the time? Interesting question. S. California greed. Gullibiliity. People come to SD to go to the beach and play golf, and don't want anyone rocking the boat. Best, Don Bauder

Shall we just use the entire population of the United States, and say that there are 32.5 million people with higher IQs in the US? That is roughly the population of California. Does that smooth out the geographical differences enough for you?

There are roughly 105K people in Cambridge, so even if 100% of their IQs are higher than 120, you still have a large number to account for.

If you don't have a firm grasp of ethics by the time you get to Harvard grad school, I think the only thing you will learn from their "ethics" class is that other people have them and you can attempt to use that fact to your advantage.

If you don't have a firm grasp of ethics by the time you get to Harvard grad school, I think the only thing you will learn from their "ethics" class is that other people have them and you can attempt to use that fact to your advantage.

LOL...you are so right!!!....I have said the exact same thing over and over again in regard to the legal profession.

There is only one REQUIRED class at all ABA law schools-professional responsibility. That is it, just that one.

In addition to passing the bar exam, in 48 of the 50 states you must take and pass the MPRE, the Multiple State Professional Responsibility Exam.

I have said what you said a MILLION times, if you do NOT have good ethics and morals by the time you enter law school, and certainly by the time you graduate then you NEVER will, and these so called "tests" and classes are just a waste of time, effort and money. They teach nothing.

Obviously this is all Greek to you, so I will try this in English. One hundred and twenty NOIMOSYNIS INDEX is quite above average, but not very (in any real sense. In fact, there are so many people with a higher OVER NOIMOSYNIS in the United States as there are people in California.

That may be true, but unfortunately you do not appear to be one of them.

I like cats.

Response to posts #67-70: Does anybody know Mozart's IQ? He lived long before there were IQ tests, of course, but I think some scholar who didn't have enough to do calculated what it would have been. Best, Don Bauder

About the time I received my MBA (early 70's) Harvard took up the cause of a need to teach ethics in business school. The business school there used its Harvard Business Review as the venue to push for inclusion of ethics in all MBA curricula. the authors of articles expressed how important ethics were to the continued acceptance of capitalism in society. They apparently succeeded by the early 80's.

So, are these more-recently educated MBA's more ethical than those who came along before? The business excesses of the 80's, which were followed by the blowoff of the 90's, and the recent national financial fiascos say that just the opposite is true. I agree with those who commented that ethics training past the age of 18 or 20 is probably pointless--by that age, you either are ethical by nature, or not. But it is actually worse, because those courses probably illustrate just how disadvantaged you are if you play ethically and your opponent (who may be your boss, your subordinate, a coworker, competitor, collaborator, etc.) does not. Even a small corner cut can give one person a huge advantage in some situations. As a result, the focus on ethics in a course intended to improve behavior may have just the opposite effect. While it tells the students they SHOULD be ethical, it also makes them hyper-aware of the advantages conferred by being unethical. Finally, if there are enough fundamentally dishonest people in a company or other organization, all the others have to forget their ethics to survive. Sound like Fannie Mae, Freddie Mac, AIG, Citigroup, Lehman Brothers, and Goldman Sachs? Ans: Yes, it accurately describes the bad guys to a "T".

I didn't understand your post, but my dogs are Rhodesian Ridgebacks and they were rolling on the floor (which is actually rather impressive since Swahili isn't spoken in Zimbabwe, so I am not sure where my dogs picked it up).

Don, unfortunately my dogs don't know much about European music, so they can't help your vizslas with the Mozart question. They are, however, quite good at breaking our rules (almost Harvard MBA caliber) and their ability to dig their way out of our yard may be a plus in the coming underground economy.

As for myself, I have played plenty of Bartok in my day, so maybe I can translate for your vizslas. Hopefully your dogs are not too advanced for me, as I stopped well short of Liszt (though I still hack at it occasionally, and dream).

I am also a fan of Paul Erdős, though most of the pertinent details are Greek to me.

Mozart and Beethoven are ranked the same, with an adjusted score of 143.

Leibniz was at 173 and Newton at 168, so I guess Leibniz gets some small measure of revenge.

One last comment on IQ's in general; one of my few true personal heroes, and quite possibly the single most brilliant man of the 20th century was Richard Feynman, and he claimed to have scored 124 on an IQ test in high school.

I've seen a lot of comment threads get hijacked, but this one went completely whacko.

IQ has nothing to do with anything, people. Nor does feeding paragraphs into a translator and spitting out a foreign language, because the minute you do, someone is going to come along and know you did it. On IQ, I will say that educators in my time considered that anything above 130 was gifted. It still didn't mean anything, only that there was aptitude. Aptitude at what, who can say?

And ethics, well, that's sort of a relative term. As Don pointed out, one person's questionable ethics certainly depends on another person's honesty. In the case of Dominelli, was it so much a question of his ethics, a question of the ethics of the girl he pined for, or the honesty of the people he bilked? Or maybe a combination?

and all of them we rescued from animal shelters. In fact, every pet I have ever owned has been rescued from the shelter.

Same here, all shelter rescures.

But I only take the seniors, because they are the hardest to get adopted out-everyone wants the puppies and kittens.

I picked up a 14 y/o Cocker Spaniel senior 3 weeks ago from the Pasadena shelter. I went there for this dog Princess who was great-Princess was having trouble getting any activity b/c she was 6 y/old. So we met and she was great, and on the way out as I passed the last kennel I saw 14 y/o Sully and asked what his story was. Sully adopted out as a puppy in from Pasadena in 96, but the old lady who cared for him went blind and kept tripping over him, so she had to turn him in. So I met Sully, and knew he was in greater need. They wanted to know if I wanted both Sully and Princess-I said I would take Sully that day, and backstop Princess if no one claimed her in 3 weeks- I would come back and adopt her too. Princess could not leave the same day b/c she needed to be spayed. Anyway-Priness was adopted 8 days later-I wish I had claimed her the same day I took Sully. But princess was adopted by one of the volunteers so she is in a good home.....and Sully is a fantastic dog.....so it all worked out. Made a very LONG road trip today to the Chatsworth Shelter up by Simi Valley.....didn't take the dog I went to see..long story.

"Nor does feeding paragraphs into a translator and spitting out a foreign language, because the minute you do, someone is going to come along and know you did it"

Umm, that WAS the joke. I really don't think anybody was confused for even a moment whether a translator was used. The topic had already gone so far off course as to be incomprehensible, so it seemed natural to take it the rest of the way.

Of course I am terribly hurt that nobody responded to my hex dump, since I actually did write that!

Response to post #87: This is how stupid I am: I didn't know you could stick a paragraph into a translator and watch as it spits out the words in another language. I guess if I would have thought about it, I would have known of the possibility. Best, Don Bauder

Response to post #88: Pope was my mother's favorite poet. She would be happy that he has a 180 IQ. But she thought Dickens was a little cornball. She would not be happy about his 180. She died in 1997 at age 97. Best, Don Bauder

Don, you can translate whole websites as well. It is actually rather amusing to read a Chinese newspaper through a translator and try and guess what the stories are about through the really bad translation.

Translators are becoming so easy to use and they cover so many languages, that I foresee in the future people will be less inclined to learn other languages. In a very warped sense the internet then becomes the tower of babble, and without it nobody can talk to each other any more. It also makes people overly reliant on very suspect translations that completely miss any subtlety, so that language will have to be dumbed way down to translate correctly.

BTW surfpuppy, what's the significance of 5-13-99

"I honestly thought Apple was going to go out of business when their stock was $23 a share in the early 90's."

AAPL actually hit bottom later in the 90's (on December 1, 1997 it was a split adjusted $3.28. I believe there were two 2:1 splits since then, which would make that $13.12 at the time). 1997 is the year that Jobs regained control of the company as CEO. He had been gone since 1985.

After a bit of a rise from the dot-com bubble, it settled back down to the 7's. It was $7.11 (or $28.44 pre-split) as late as 4/1/03. I almost convinced myself to buy some when Jobs first came back (1997) and then again during early 2003 but I never did, which is testament to my investing acumen.

I will be very interested to see what happens to Apple when/if Jobs health forces him to step away again, because the company is such a personality cult and the company lost its focus and floundered the last time he stepped away.

Yes, the turn around of Apple has been nothing short of amazing. And yes, Jobs is the reason, he is their leader, physically, spiritually, technically-in every sense of the word.

And the funny thing is while Apple has had such an amazing and strong rebound-Microsoft has laid bomb after bomb after bomb. I mean they bascially stole everything they have to start with (including windows), but outside of the Windows OS, they have had so many failures it is shocking, and even Windows OS has had some pretty big let downs recently.

Technology changes so fast, and todays success my be tomorrows crash and burn...

His brother and I were hanging out and he was telling how cool a place it was and how cool the Macintosh was.

The Mac changed the face of personal computing with the first GUI for the masses on the Mac in 1984, and then MS stole it ( a version of it) and developed the Windows system and left Apple in the dust...of course apple stole the GUI from Xerox, so I don't shed any tears for Apple either.....

But today Apple is by far the most innovative company in America, and maybe the world.......of course they have shifted away from the computer-and they dropped "computer" from their corporate name as well.

Response to post #117: Apple is said to have some good backups in case Jobs can't continue. One of the most important jobs (no pun intended) of a CEO is making sure that good management continues. Best, Don Bauder

BTW surfpuppy, what's the significance of 5-13-99

Actually I left out an imnportant reason for using 1999 with mny DJIA comparison, that was the year Calpers passed SB 400, whch was the retro active pension give away that created the 3%@50 pension.

Calpers said in 1999 that their investments would cover the costs of SB 400, and that the rising stock market would cover the majority of those costs. Acording to Calpers the DJIA would be at 28K by 2010.

So in the context I used the 1999 date-it was directly tied to a claim made by Calpers, a claim that has been thoroughly discredited, that the pension system would pay for all the largess doled out as political favors.

I am sure that Apple has some good people at the top, but as a casual Apple observer I can't name any.

Apple has two major problems going forward:

1) They draw top talent largely on the basis of the coolness factor of their product line which is a direct reflection of their very charismatic and very public face of the company, Steve Jobs. When he left the last time and a more faceless corporate structure ran the company, they lost that edge very quickly.

2) They have grown so large that they can longer lure top talent through the incentive that your stock options may make you rich.

Years ago Gates was paranoid about Microsoft losing its edge and not being able to attract the top new talent. Tech companies wither very quickly when they stop being the most attractive choice for new graduates. For years now Microsoft has resorted to acquiring top talent through acquisitions rather than hiring. It would be hard to market that approach at Apple since the company has long been sold on the basis of in-house innovation.

The truth is that Apple is already falling behind Google in innovation, and is being undercut in many of their most profitable areas. Of course Google is in somewhat of the same boat, as they have grown so big so fast it will be interesting to see whether they can maintain their corporate style. Th advantage Google has is that Brin and Page are 20 years younger than Jobs.

In any case, Apple faces a very difficult post-Jobs transition and it will be interesting to see how they go about it and how successfully they can pull it off.

Response to post #129: Yes, remember all those claims of Dow 25,000 or more by this time? Unfortunately, many investment strategies were based on such predictions, just as decisions to buy houses one couldn't afford were based on the myth that housing prices only go up. Giddiness is so often the enemy. You simply can't take a trend that has been in force for five or ten years and project it into the indefinite future. Best, Don Bauder

Response to post #130: You make some very good points. Your point that young talent may shun Apple because its stock is too high to make one rich also applies to Google. Gates was right to worry about Microsoft, particularly since his concerns have come true. Best, Don Bauder

Response to post #142: The cumulative amount of money I made at the U-T in 30 years was hardly impressive. I was in hot water most of the time I was there. Journalism is no career if your goal is getting rich. Best, Don Bauder

Here are a few points to ponder regarding computer technology from yesterday and today:

1)To me, Apple Computers (and still are) just not my bag. For what you pay for the latest Mac, you can do so much better with a Windows-OSed machine, finance-wise.

2)When I was in college, the world of PCs was just starting to be explored. I remember the "five sisters (Apple, Texas Instruments, TRS, Commodore, Atari) of personal computing" at the time. The group support was great--because the products were not too good (TRS-80="Trash-80").
My first time on a "PC" was on an Apple IIE. The college only had one (the rest of the 'puters were on a time-sharing HP mainframe with dumb terminals). In fact, all of my IT-courses (between 1982-1985) were on college-supplied Apple products...and I loathed every minute of time on them.

3) My first experience with GUI-based OS'es was not Mackintosh, but GEOS (Graphics Environment Operating System), written for the Commodore 64C. Once I tried it...I was hooked on GUI!
Of course, my Commodore turned into the "Commode 64C," mainly because the keyboard and power supplies were POS-squared. But it gave me a taste for Windows...when I could afford it.

4)To me, Apple is a techie-cult, run by the "all-seeing prophet" Steven Jobs. The products are overpriced for their capabilities, yet their advertising implies that if you do not have the "latest-and-greatest" fruit from the "Apple Tree," you are nothing.

If given a chance to buy into Apple through stock...no thanks. I've always said "If it's not Big Blue, it's not a computer, but an overgrown video game system."

My first time on a "PC" was on an Apple IIE. The college only had one (the rest of the 'puters were on a time-sharing HP mainframe with dumb terminals). In fact, all of my IT-courses (between 1982-1985) were on college-supplied Apple products...and I loathed every minute of time on them.

That is when 25 Mhz 286 computers were $5K and Apple was trying to corner the education market. In fact when Jobs was booted from Apple he started nExt computers to go after the education market-and flopped big time.